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Web.com Small Business Toolkit: Expand My Brand Startup Competition (Social Media Competition)

September 17th, 2012 ::

Expand My Brand Startup Competition

The Expand My Brand Startup Competition is a startup competition and symposium bringing top brands and emerging social media startups together to explore how technology is shifting the brand marketing and advertising business.  The event takes place in New York City on September 27, 2012, and one lucky business will win expansion capital. Five social marketing tech startups will pitch to a panel of brands to prove how their tools will “expand their brand.” The winner gets to go through an incubation program and receive $30,000 in startup assets. Purchase your tickets to participate in important panel discussions and presentations.

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Posted in Capital Access, Events, Marketing, Raising Capital, Small Business, small business, Social Media, social media, Technology | No Comments »

Web.com Small Business Toolkit: Biz2Credit Women in Business (Financing for Women Entrepreneurs)

September 11th, 2012 ::

Biz2Credit Women in Business

Biz2Credit, which has been connecting small and midsized businesses with lenders and other business tools since 2007, has recently launched their Women in Business site. The site targets women business owners whose companies have been in operation for less than three years and have under $1 million in sales and fewer than 50 employees. Owners can take advantage of the small business financing package, which includes a business plan prepared by Biz2Credit’s small business experts; one month of financial consultation by a Biz2Credit case manager; access to a financial snapshot of your company; and recommendations for increasing credit scores, lowering interest rates and more.

 

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Posted in Accounting and Taxes, Capital Access, Compliance, Raising Capital, Resources, Small Business, small business | No Comments »

Will the Community Bank Crunch Squeeze Small Business? How to Find Out

September 6th, 2012 ::

By Maria Valdez Haubrich

If your small business has received loans or lines of credit from a community bank—or was hoping to do so—you might find it becoming more difficult. Inc. recently reported on a coming crunch that is hitting community banks, with possible ill effects for small business owners who depend on those banks for capital.

The problems stem from the Troubled Asset Relief Program (TARP) which gave banks nationwide funds from the U.S. Department of the Treasury that had to be paid back with interest. While Inc. reports that the nation’s larger banks have already paid back their TARP debt, about 300 community banks across the country haven’t yet done so.

The Treasury Department is winding down the TARP program, raising interest rates for banks that still have outstanding debt to pay back. These banks are being hit with a perfect storm: In addition to the need to pay back principal and higher interest, new federal regulations as a result of the Dodd-Frank Act require community banks to have more available cash for emergencies.

The result? Many community banks are being forced to cut back on lending to small business in order to handle their TARP responsibilities and have enough cash. That’s bad news for small businesses, which rely greatly on community banks for their capital needs.

Inc. cites FDIC data that smaller banks (those with $5 billion or less in assets) made $336 billion in small business loans in the first quarter of this year. By comparison, banks with $5 billion or more in assets made loans of $311 billion to small businesses. Small business loans account for nearly one-fourth of all loans by community banks, compared to just 5 percent of bigger banks’ lending.

How can you know if your bank will be affected by this issue? The best way is to talk honestly with your banker. Ask whether the bank accepted TARP funds and, if so, whether they have paid the money back. If not, try to get the banker’s take on how this responsibility will affect future loans to small business.

Even if your bank is not affected by TARP, be aware that small business owners whose own banks are cutting back on lending may start approaching your bank for loans. In other words, if you were considering applying for a loan or line of credit, the time to act is now.

Image by Flickr user Alan Cleaver (Creative Commons)

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Posted in Capital Access, Raising Capital, Small Business, small business | No Comments »

Small Business Owners’ Economic Outlook: Holding Steady

September 3rd, 2012 ::

By Karen Axelton

As election season begins in earnest, how are small businesses feeling about their own—and the nation’s–economic outlook? Capital One’s second quarter 2012 Small Business Barometer, a quarterly survey of U.S. small businesses, asked entrepreneurs about their current financial conditions and what they expect for the next six months, and found steady, but modest growth.

Gains that began in 2011 are continuing in 2012, the survey found. Some 45 percent of small businesses say their companies are facing the same economic conditions as last quarter, and 38 percent say their economic conditions have improved. Just 17 percent felt economic conditions were getting worse. Asked about their own businesses’ financial situation, 44 percent say it’s better than it was a year ago, 40 percent say it’s the same, and just 15 percent say it’s worsening.

What’s more, 37 percent of small businesses plan to add jobs in the next six months—a two-year high. Sixteen percent say they have job openings they can’t find qualified people to fill, a slight increase from the previous quarter.

As for the coming six months, small business owners are cautiously optimistic, rating the national business outlook at 6.0 out of a possible 10 points—mostly due to concerns about sales and profit margins. Reflecting this cautious attitude, most of the small businesses surveyed say they plan to keep spending, business development and investment consistent with current levels. Seven in ten will keep spending at the same levels—a two-year high, 9 points higher than last quarter and 5 points higher than last year. Just 15 percent of companies expect to increase business development and investment spending.

One positive sign is that one-fourth of small businesses have tried to obtain financing in the last 12 months—the highest percentage in the past nine quarters of survey data.  While 42 percent of small businesses say getting financing is harder than it was six months ago, that’s down 10 points from the percentage who reported difficulty the previous quarter.

“We’re seeing some hesitancy and concern about prospects for the remainder of the year, as well as a limited line of sight to growth,” said Jon Witter, President, Retail and Direct Banking at Capital One. “Small business owners are moving forward with continued caution and pragmatism as they consider their plans and projections for the coming months.”

How does this outlook compare with your own? Are you feeling optimistic about the months ahead?

Image by Flickr user carlos.a.martinez (Creative Commons)

 

 

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Posted in Capital Access, Raising Capital, Small Business, small business, Workforce | No Comments »

How to Prepare Your Business for Expansion

August 30th, 2012 ::

By Karen Axelton

Do you have big plans for your small business? If you’re gearing up to add a location, expand into new markets, add ecommerce to your offerings or start selling internationally, there are some things you need to consider before you grow. Here’s a shortlist of things to think about to make sure you’ve got all the bases covered.

Your company’s structure. If you need to adjust your legal form of business in order to take on more investors, add partners or meet the requirements of the new state/s where you’ll be doing business, now is the time. Consult an attorney to make sure your company dots all the I’s and crosses the t’s before it’s too late.

Your company’s name. The name that has served you up to this point may not work so well if you’re going national, international or in a different direction. Ask friends, family and customers what they think your current name conveys. If it doesn’t convey what you’re trying to accomplish, brainstorm some new ideas and use surveys and focus groups to test how well they work.

Your company’s trademarks. If you’ve changed your name or logo in preparation for the expansion, make sure you protect them with a trademark. Visit the U.S. Patent and Trademark office’s Trademark section to learn more about applying for trademarks and to apply online.

Your operations. If you don’t have an operations manual for your business, now is the time to create one. You’ll want to standardize your operating procedures so they can guide you in your growth and ensure that all facets of your business—every location, employee and sales channel—deliver the same customer experience.

Your employees. Expansion requires employees you can trust to do what you’d do when you can’t be there. If you’re not comfortable with delegating, you’re going to have a problem. Start now to develop a strong bench of key managers who can be “you” when you’re not around.

Your financing. Given today’s tight lending environment, hopefully you’re financing your expansion from within. But whether or not you’re seeking outside capital, it’s smart to develop a business plan that will guide your expansion and put the money you’ll need in black and white. Develop a “Plan B” you can follow if the financing you seek doesn’t come through. In fact, develop Plan C and D, too.

Image by Flickr user Tatters:) (Creative Commons)

 

 

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Posted in Business Development, Business Law, Capital Access, Compliance, Raising Capital, Small Business, small business, Workforce | No Comments »

Temporary SBA 504 Loan Program Provides Working Capital for Small Businesses

July 19th, 2012 ::

By Maria Valdez Haubrich

Are you looking for cash or working capital to grow your small business? Then you should know about a temporary Small Business Administration (SBA) program that could help. As part of the Small Business Jobs Act passed in 2010, the SBA started a temporary program enabling small businesses to refinance eligible fixed assets through its 504 loan program without having to expand their businesses. This temporary refinancing program will expire on September 27, 2012, so now is the time to see if it can help your business.

Here are some of the benefits of the temporary 504 program:

  • Eligible small businesses can get below-market pricing and long term, fully amortizing fixed rate loans.
  • You can finance up to 90 percent of the property’s current appraised value.
  • In some cases, you can “cash out” proceeds from the refinancing to pay eligible business expenses, including payroll, inventory and accounts payable.

Eligible applicants for the 504 refinancing program must:

  • Show that their loans are current
  • Have made all required payments in the last year with no payments more than 30 days past due.
  • Debt to be refinanced must have been incurred at least two years before the date of the loan application

The temporary program is structured like SBA’s traditional 504 loan program (although it’s separate from that program). Small business borrowers work with third-party lending institutions and SBA-approved Certified Development Companies (CDCs) to get financing. The loan is typically made up of three parts:

  • A loan (or first mortgage) secured with a senior lien from a private-sector lender covering up to 50 percent of the project cost,
  • A second mortgage secured with a junior lien from an SBA-approved CDC covering up to 40 percent of the cost, and
  • A contribution of at least 10 percent equity from the small business owner.

For more details about the temporary 504 loan program, visit the SBA website and the 504 FAQs page.

Image by Flickr user vxla (Creative Commons)

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Posted in Capital Access, Raising Capital, Small Business, small business, Uncategorized | 3 Comments »

Bills Would Make It Easier for Credit Unions to Lend to Small Businesses

July 17th, 2012 ::

By Karen Axelton

Small business financing could get easier to find if two pieces of pending legislation pass. Recently introduced by Kurt Schrader (D-Ore.) and Steve Chabot (R-Ohio), the Credit Union Small Business Lending Act (H.R. 4191) would make it easier for credit unions to participate in Small Business Administration (SBA) loan programs.

Another pending bill, H.R. 1418, would raise the cap on how much credit unions can lend to businesses. Currently, credit unions can lend a maximum of 12.5 percent of their assets to member businesses. The bill would raise that percentage to 27.5 percent, significantly expanding credit unions’ ability to make small business loans.

More and more small businesses have been turning to credit unions in the aftermath of the recession, Small Business Trends reports. It’s easy to see why: Over the past year, credit unions have steadily increased the percentage of small business loans they approve, from 51.2 percent in May 2011 to 57.6 percent in May 2012, according to the Biz2Credit Small Business Lending Index. In contrast, the majority of small business loan applications to banks are rejected.

“Allowing credit unions to do more to help small businesses is an important step toward helping our nation recover from the current economic downturn,” says Robert Marquette, at-large director for the National Association of Federal Credit Unions (NAFCU), a national organization that focuses on federal issues affecting credit unions.

The average credit union small business loan is for $185,000—a small enough amount that loans of this size are often difficult to obtain from banks. Testifying before Congress about the need to pass both bills, Marquette told legislators that since the end of 2007, applications to credit unions for small business loans have grown from $87 million to $259 million in 2011.

According to Rohit Arora, CEO of Biz2Credit, there are several key reasons credit unions are increasingly becoming a funding source for entrepreneurs. Credit unions are typically more involved in the local business community than bigger banks, generally have more flexible lending requirements, can make lending decisions more quickly and are less reliant on automated scoring. What’s more, many credit unions even offer better financing rates than bigger banks.

Have you used credit unions to finance your small business?

Image by Flickr user cometstarmoon (Creative Commons)

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Posted in Capital Access, Raising Capital, Small Business, small business, Uncategorized | 3 Comments »

What the JOBS Act’s Crowdfunding Provision Means for Your Small Business

July 5th, 2012 ::

By Karen Axelton

Have you used crowdfunding to raise capital for your business, or have you considered it? The JOBS Act signed into law by President Obama on April 5 creates new potential for entrepreneurs to raise money via crowdfunding—but also adds new levels of complexity.

According to crowdsourcing.org, global crowdfunding raised some $1.5 billion in 2011.  Prior to the JOBS Act, crowdfunding sites were only able to solicit donations from contributors—not investments. Because these were donations, they were typically small amounts. A crowdfunding provision of the JOBS Act changes that, allowing small business owners to raise investments (up to $1 million per investor) via crowdfunding websites.

As of July 4, you will be able to crowdfund from “accredited investors” (whose net worth, excluding the value of their primary residence, is more than $1 million). But the SEC still has to put final regulations in place as to how entrepreneurs will be allowed to solicit crowdfunding from nonaccredited investors.

The SEC is expected to release these regulations in January 2013. What can you do in the meantime? Use the intervening months to educate yourself about crowdfunding and the various platforms for doing so. One estimate puts the number of active crowdfunding sites at more than 450, and that number is projected to increase by as much as 25 percent by the end of the year.

Some of the benefits of crowdfunding as opposed to seeking financing from angel investors or venture capitalists:

  • It allows you to tap into a market of interested, non-professional investors who are also likely to be customers of your product.
  • You will be able to raise money from people you know even if they aren’t accredited investors.
  • You can raise capital for creating a prototype or market-testing your product before launching it.
  • Unlike traditional capital-raising, crowdfunding also creates public awareness of your business, serving as a marketing tool.

Of course, crowdfunding investments is not a simple process, and you will need to enlist legal and accounting help from someone familiar with the process. In the meantime, some existing crowdfunding platforms to check out include SomoLend, Indiegogo, Kickstarter and Peerbacker. You can learn more about crowdsourcing in general at www.crowdsourcing.org.

Image by Flickr user Karen O’D (Creative Commons)

 

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Posted in Accounting and Taxes, Business Law, Capital Access, Compliance, Raising Capital, Small Business, small business | 1 Comment »

Small Business Owners Feel Confident About Their Businesses and Their Finances

June 19th, 2012 ::

By Karen Axelton

Despite economic ups and downs, overall the nation’s small business owners are feeling very confident about the economy in general, the outlook for their businesses in particular, and their ability to get the capital they need to operate and grow, according to Bank of America’s first Small Business Owner Report.

Small business owners believe the local economy matters more to their businesses’ success than does the national economy. Some 69 percent say the local economy is “very important” to their businesses, which may be why they’re feeling good about their prospects for the next 12 months. Though only 35 percent think the national economy will improve in that time period, 42 percent say their local economy will get better.

In keeping with their self-directed attitude, the majority of small business owners (53 percent) believe their decisions matter more to their businesses’ success than does the overall economy. Younger entrepreneurs (aged 18 to 34) were even more likely to feel this way (66 percent).

Some 31 percent of small business owners plan to add staff in the next 12 months, with the number of employees expected to grow by an average of 25 percent. More than half (56 percent) say their staffing levels will stay the same, which is encouraging in itself after years when many layoffs have occurred.

But staff isn’t the only thing that’s growing for the nation’s small businesses. Nearly two-thirds (61 percent) project their sales will increase in 2012, with 32 percent expecting their revenues to stay about the same.

What challenges are small business owners facing? Not surprising in an election year, 75 percent cited the effectiveness of U.S. government leaders as their top concern. Other worries included oil and gas prices (73 percent), consumer spending (71 percent) and the cost of health care (70 percent).

Overall, small business owners don’t express much worry about the availability of credit, which ranked as one of the bottom three concerns among respondents. More than three-fourths (78 percent) of applicants who applied for a loan within the past two years were approved, and 71 percent of respondents say they currently have enough capital to run their businesses effectively.

Far from thinking it’s too difficult to get business loans, one-fourth of respondents believe today’s lending requirements are appropriate and shouldn’t change. In fact, 20 percent say requirements to get business loans should be even more stringent so that small business owners would be less likely to default.

Image by Flickr user apdk (Creative Commons)

 

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Posted in Capital Access, Raising Capital, Small Business, small business, Uncategorized, Workforce | 1 Comment »

How to Find a Small Business Friendly Bank—and Get a Small Business Loan

June 12th, 2012 ::

By Maria Valdez Haubrich

Small business owners need financing to expand and grow their businesses, but small business loans have never been easy to get—and since the Great Recession struck, funds have gotten even more elusive. The average bank uses just 7.65 percent of its deposits to make small business loans, according to small-business-loan broker MultiFunding.com. That’s why MultiFunding decided to create a new tool that helps small businesses find small-business-friendly banks near them.

The new tool, Banking Grades, allows business owners to search for small business friendly banks by name, address or location. Users can also view a list of the 2,500 or so banks that received an “A” grade.

MultiFunding CEO Ami Kassar explains that the ranking was created by taking all FDIC regulated banks nationwide and using FDIC data to rate the banks based on the ratio of business loans of $1 million or less to total domestic deposits. Here’s what the rankings mean:

A (Excellent): Uses at least 25 percent of its deposits to make small-business loans

B (Good): Uses 10-25 percent of its deposits to make small-business loans

C (Average): Uses 6-10 percent of its deposits to make small-business loans

D (Poor): Uses 3-6 percent of its deposits to make small-business loans

F (Failing): Uses less than 3 percent of its deposits to make small-business loans

Kassar says the banks with the highest grades tend to be smaller, community banks that are focused on helping small businesses. That doesn’t mean these banks are a slam-dunk, however. Kassar says access to credit is loosening up, but only very slightly.

How can you improve your chances of getting a loan? Kassar’s advice includes:

  • Be well-organized. Have all your ducks in a row such as financial reports and statements.
  • Have collateral to pledge against the loan. Unsecured loans are more difficult to obtain.
  • Have good cash flow. The bank wants to feel confident the loan will be repaid.
  • Find the right bank. “Find a bank or lender where the loan officer and the credit officer collaborate and work together to find a way to make it happen [for you],” he says.

While Kassar feels credit unions are also a good source for small business loans, he notes that they file different reports than banks do; as a result, including them in Banking Grades would have been an unfair comparison.

Image by Flickr user _fidelio_ (Creative Commons)

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Posted in Capital Access, Raising Capital, Small Business, small business | 2 Comments »

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